French Senate approves “anti-Amazon law”

The
French Senate has unanimously approved a law that prohibits online booksellers to
combine a 5 % discount with free shipping. That is a blow for Amazon, which
dominates the French online book market with a market share of 80 %.

Amazon
dominates too much?

Minister of Culture Aurélie Filippetti has kept her word: she vowed to
protect traditional book stores from the dumping tactics used by the Amazons of
the world. It took fifteen years for the internet to become France’s third largest book sales channel, with a
market share that now reaches 17 %. Traditional book stores are still first, with supermarkets (both specialists like Fnac and classic supermarkets like Leclerc and
Carrefour) coming in second.

French publishers can decide the fixed
book price since 1981, but that principle got weakened throughout
the years and a 5 % discount on that fixed price was allowed. Amazon is now not
only offering that 5 % discount all the time, but also offers free shipping.

The
result is that Amazon now dominates
online book sales with 80 % of the market, strangling all
competition. Other online parties (like Fnac.com, which has had to follow suit
and see costs rise) suffered, but traditional book stores fared the worst. The
profitability of an average French traditional book store is between 0.6 and 2
% of the total turnover.

"Fair
competition "

The
new law now prohibits the combination of free shipping and the 5 % discount: “This law is not intended to hamper online
book sales, but to ensure fair competition. This is one of the elements to support the book sector”, Minister
Filippetti emphasizes.

Amazon
obviously disagrees: “Every measure that increases the price of books online,first and foremost punishes the French
consumer, undermining their purchase power.” Traditional retailers also had to admit their victory was only symbolic, as Amazon is still free to ask just 1 cent for shipping costs.

“This is a
symbol, but an important one when you realize Amazon’s and Fnac.com’s
entire communication is based on that free shipping”, Guillaume Husson of the “Syndicat de la Librairie française” stated: “It will be more difficult
for them to communication about cents... From now on, a book will always be
cheaper in stores than online.”

The trade union has accused Amazon of “dumping practices”
for a while now. The American giant “sells with a loss to kill off
competition and gain a monopoly in the book market. After that, they can raise
prices, which will not benefit readers”, Guillaume Husson believes.

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